The Unemployment Rate is Not the Best Measure of the Economy or a President

A friend sent me and many others this email :

"To: anyone who will listen.....
Since I've been trying to pay attention to the spin by both sides as we approach Nov. 6, (I've already voted, btw---for Obama), I went to the website of the Bureau of Labor Statistics, and found the following eye-opening chart. It clearly shows the decline in the unemployment rate during the Bush years, then the precipitous climb (a loss of 2.5 million jobs) during his last year in office. The trend continued when Obama took over the mess, and, since '09, a steady, gradual decline in UNEMPLOYMENT.
What I'd like to know is why this clear picture isn't being plastered ALL OVER for everyone to see......let's get going!!!!!"

Accompanied by this chart :

My response to her (Using BLS data):

The unemployment rate and the way it is determined tells only part of the economic story and is relied on far too heavily by the sound-bite media.

The reality is that in August 2012, we had about the same non-farm payroll (133,244,000) as we did in January of 2005 (132,453,000). In Jan 2008 it was 138,023,000. In January 2009 it was 133,561,000. Meanwhile, the population has grown from 295,753,000 to 314,159,000 or 18,406,000 since January 2005. So, Obama spin claims to have created 5 million jobs, yet the number of people working has not increased since he took office.

This also means that the number of working Americans is essentially the same as it was 7 years ago while the population has increased by 6.2%.

Meanwhile the median household income (inflation adjusted) looks like this:
2005 $53,371
2008 $52,546
2011 $50,054
Change = -6.2%

So, looking at the economy from the data about workers and population and household income, shows a very weak economic recovery, one that does not provide sufficient good paying jobs for our people, many of whom have dropped out of the workforce and/or stopped looking for work These people are not included in the unemployment rate determination. Some estimate the true unemployment rate to be closer to 11-12%.

I’d love to talk more about this with you, but Obama’s positive contribution to the economic ‘recovery,’ such as it is, is de minimus, despite he and the Congress increasing the debt by ~ 6 $Trillion to stimulate it.

All spin aside, the media and we give far too much credence to the power of a President over the economy. Congress is the real player, albeit heavily influenced by the President, when it comes to fiscal and economic policy and their record is dismal. For example, the Senate has not passed a budget in more than three years.

Romney’s approach makes more sense to me than another 4 years of Obama.

New York faces most intense storm in history - Outside the Box - MarketWatch

New York faces most intense storm in history - Outside the Box - MarketWatch:
A nasty confluence of forces seem to be converging on the NY-NJ area. This is a Friday, 10/26/12 forecast so a lot can happen before the storm hits in a few days.

"...For those south of the center, the storm’s circulation will actually be pushing flooding seas away from shore, lessening potential impacts.
Right now, the most reliable model tracks have clustered in a relatively tight range from Delaware to New York City. Counter-intuitively should the center of the storm make a direct strike on New York City, the city may actually be spared some of the more serious coastal impacts from the storm.
Should the storm continue on its current path (the National Hurricane Center’s most likely landfall is now in southern New Jersey), all bets are off for the five boroughs.
The latter scenario — the one that now appears most likely — would have many feet of ocean water funneled into New York Harbor over a period of up to 36 hours. Unlike Irene, which quickly transited New York City last year as a weakening tropical storm, Sandy may actually be in the process of strengthening when it makes landfall.
The result could prove incredibly damaging for coastal residents and critical infrastructure. Keep in mind that Irene was only inches away from flooding subway tunnels in Lower Manhattan. Storm-surge forecasts for this scenario haven’t been officially released yet, but six to 10 feet in the city is not out of the question in a worst-case scenario.
That result would put about 700,000 people’s homes underwater, according to a Climate Central interactive analysis. Add to that waves of 10 to 20 feet on ocean-facing shores, and an additional foot or so of tidal influence from the full moon, and we could be dealing with quite a mess on our hands.
With National Geographic reporting that sea level rise is already accelerating at three to four times the global rate in the Northeast due to climate change, impacts are expected to be worse than if the same exact storm would have hit several years ago.
Should Sandy veer further north of its current track and make landfall right over the city, storm surge could be dramatically lessened, though the city could receive about double the amount of rainfall — up to a foot or more.
For these reasons, if I were a resident of New York right now, I’d be rooting for a direct hit. If given a choice, I’d take 12 inches of rain over six feet of coastal flooding any day.

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Ain't It the Truth!

Journalism and the truth: More complicated than it has ever been — Tech News and Analysis - http://gigaom.com/2012/10/23/journalism-and-the-truth-more-complicated-than-it-has-ever-been/?utm_medium=referral&utm_source=pulsenews

Race for President Leaves Income Slump in Shadows - NYTimes.com

Race for President Leaves Income Slump in Shadows - NYTimes.com: "Many of the bedrock assumptions of American culture — about work, progress, fairness and optimism — are being shaken as successive generations worry about the prospect of declining living standards. No question, perhaps, is more central to the country’s global standing than whether the economy will perform better on that score in the future than it has in the recent past."

Some well-reasoned analysis in this piece, most of which I agree with. In the 'silly season' before elections politicians often deal with 'froth' in their campaigns because the underlying forces driving our fiscal mess and poor performing economy cannot be dealt with in a sound bite or 30 second ad.

The fundamental issue in the Presidential campaign is whether the government is the best solver of our economic and fiscal problems of whether the role of the private sector can best do it. I favor the private sector and I think more and more voters are coming around to that viewpoint because they see the trillion dollar deficits of TeamObama have produced poor results and unsustainable debt but little economic improvement.
Missing from the story is the corrosive effect of entitlements on America's fiscal health. Entitlements persuade people who have them not to lose them and to vote accordingly. (Entitlements do little to grow the economy except provide a source of consumer spending.) Politicians know this and too many pander to the recipients for their votes.

The fundamental problems in our economy have no quick fix, yet that's what too many voters unrealistically expect and that politicians over-promise with their 'make sure...' rhetoric.

The only way to improve incomes is to grow the pie (the economy) not redistribute it. Even if all the income of the super-rich was confiscated and applied to the deficits it would be a drop in the bucket.
It boils down to this: Which Presidential candidate and Congresspersons do voters trust to best set a course to solve the problems we face. Romney's proposals ring truer than Obama's.

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The German Woes of Big Wind

http://www.businessinsider.com/germanys-wind-power-chaos-2012-9

Written by a Brit, this story suggests that Germany's rapid investment in Big Wind and solar is causing costly technical problems in managing the grid for stable, reliable operation. They have also decided to shut down their nukes which exacerbates the grid reliability problem.